Koninklijke Vopak Uns/Adr

Good morning everyone and welcome to our half year 2024 results.

will guide you through our latest results. We will refer to first half 2024 analyst presentation, which you can follow on screen and download from our website. After the presentation, we will have the opportunity for . A replay of the will be made available on our website as well. Before we start, I would like to refer to the disclaimed content of the forward-looking statement, which you are familiar with. I would like to remind you that we may make forward-looking statements during the presentation, which involve certain risks and uncertainties. Accordingly, this is attributable to the entire call, including the answers provided during the Q&A part. And with that, I would like to hand over the call to Dick.

Thank you very much, Fatrona, and a very good morning to all of you. Thank you for joining us in this call. Let's move straight into the key highlights of the first half of this year. Let's first start on improve. The demand for our services remained strong across the portfolio and that resulted in a proportional occupancy of 92%. We continue to serve our customers well. At the same time, we reported improved financial results, growing our proportional EBITDA to 599 million, a 10% increase when you adjust that for the divestment income. Also, our operating cash return improved from 14.6% last year to 16.7% at the end of this quarter, driven by a lower average capital employed due to the divestment and a positive contribution from growth projects. Our strong business performance led us to update our full-year 2024 outlook for proportional EBITDA Reported EBITDA and Growthgatex, which Michiel will further explain later. Let's take a look at growth, because this quarter we took FID to construct a large-scale LPG export facility in Prince Rupert, Western Canada, together with our partner Altagaz. This major investment will play a crucial role in LPG export from Canada to the growth markets in Asia. At the same time, We started market consultation in the Netherlands to explore a future for LNG and new energies such as CO2 or hydrogen in the Ames energy terminal in the Netherlands. In addition to gas, also in industrial terminals we executed on our growth strategy. we announced two expansions in industrial complexes in Saudi Arabia and in China, of which I will provide some more details later. Now then over to Accelerate. During the first half of the year, we've taken next steps in the development for CO2 Next terminal in Rotterdam. Together with our partners, the engineering phase has started and we are working towards a final investment decision in 2025. Also in this quarter, in Alamoa, Brazil, 15,000 cubic meters of capacity was commissioned for renewable feedstocks. We're well positioned to be the market leader in the Brazilian renewable fuels and feedstock market, which is a key market for low-carbon fuels and feedstocks, such as ethanol and biodiesel. These developments in repurposing infrastructure for low-carbon fuels and feedstocks fits very well in our accelerate strategy. If we take a step back and look at the progress we made over the last two years. We actively managed our portfolio during this period and improved the financial performance. These actions led to a divestment proceeds of more than 500 million euro received and an operating cash return well above 12%. On the other hand, we invested almost 900 million euros in growth projects mainly in industrial and gas terminals, over the last two years, which leads to more stable and long-term earnings in our portfolio. And we made important steps in developing infrastructure for new energies by repurposing capacity for low-carbon fuels and feedstocks and a strong commitment to the development of CO2 infrastructure, hydrogen and its derivatives, and electricity storage. Move on to some of the dynamics of the key markets in which we operate and how they impact the demand for our infrastructure services. To start with the gas markets, we saw continued high utilization of our LNG infrastructure. Also, LPG demand is growing around the world, driven by petrochemical and residential demand in India, for example. These terminals have a stable financial performance given the long-term and take-or-pay nature of our contracts. The market for low carbon fuels like soft and renewable diesel is in a bit of oversupply, while the demand for these fuels and feedstock in the longer term continues to be robust. There's momentum for CO2 infrastructure, and we see policy frameworks for low carbon hydrogen evolving as well. This translates into an attractive pipeline of opportunities of CO2 and low carbon hydrogen and its derivatives. Let's move over to the energy markets, because the fundamentals in the energy markets remain healthy. Our oil hub terminals in Singapore, Fujairah and Rotterdam continue to have a strong demand. At the same time, the need for local imports are driving stable performance in our oil distribution terminals. Lastly, the chemical markets, they continue to be oversupplied. However, the impact on our chemical distribution terminals remain limited. Industrial terminals connected to manufacturing clusters show solid throughput levels. When looking at the financial performance, let me take you through the different elements of our business performance in more detail. First, note the divestment impact of 43 million euro. The divestment impact was offset by the contribution of growth projects in mainly the Netherlands, the US and Canada. The oil markets remained favorable. High occupancy rates and contract renewals drove growth in EBITDA from the oil portfolio across the globe. Chemical markets continue to be characterized by oversupply of the end products, while the impact on demand for storage infrastructure is limited. Throughput levels in our industrial terminals remained solid, and our terminals storing LNG and LPG saw increasing revenues mainly in SPEC in Colombia and other terminals in India. A one-off item related to the FID taken for REEF positively impacted the proportional EBITDA by €7 million. All in all, this resulted in a proportional EBITDA of €599 million. And when you adjust that for the divestment impact, this is a 10% increase compared to the first half of 2023. Now let's take a look at our sustainability performance. To start with safety, our personal safety performance was slightly below the one in the same period last year. On the other hand, we made good improvements on process safety. With regards to emissions, a 15% decrease in scope 1 and 2 emissions was recorded year on year, mainly by purchasing green electricity and further electrifying our operations. We do that, for example, in Vlaardingen in the Netherlands, where we are investing around 5 million euros to install an e-boiler, which will reduce the emissions of that terminal by 30%. The percentage of women in senior management remains unchanged. We continue to focus on diversity with our target of 25% of women in senior management by 2025. Let's move over to the next strategic pillar of our strategy. Growing our base in industrial and gas terminals. As said, we committed almost 900 million euros since June 22 to gas and industrial terminals, and we remain committed to capture growth opportunities in this segment as we continue to see attractive projects beyond the 1 billion euro ambition. Gas terminals provide security of supply for energy and feedstocks, and they play an important role in the energy transition. With the industrial terminals, we support our customers in key industrial clusters with long-term partnerships. Over the last 12 months, we invested in multiple gas terminals. We acquired 50% share in Ames Energy Terminal and we started the construction of a fourth tank at the Gate Terminal, both in the Netherlands. At the same time, as I said, we took positive FID to build the Reeve Terminal in Prince Rupert, Western Canada. In a strong partnership with Elta Gas, we're building 95,000 cubic meters of LPG storage capacity in a strategic location to serve the growing Asian demand markets. And VOPAC is committed to invest 462 million euro to realize this. Today, we announced two expansion projects in industrial terminals. We will expand our Chemtank terminal in Saudi Arabia to further support our industrial customer there. And in China, in Xinzhou, we are investing in a brownfield expansion project by adding 96,000 cubic meters of pipeline connected storage capacity. These projects fit very well in our growth strategy, underpinned by long-term contracts, and it will deliver attractive returns upon completion. Now let's move to India, our joint venture with Aegis. It has a strong terminal footprint. As this map shows, we have terminals around the country where we store mainly liquid chemical products and LPG, supporting the economic growth and making alternative lower carbon fuels available throughout the country. In multiple locations, we're expanding with additional capacity for chemicals and mainly LPG. As announced before, Aegis Volpac Terminals, a Volpac joint venture with Aegis Logistics, is exploring options to fund future growth. Over the last years, we've taken important actions to transition the portfolio towards assets that generate higher quality earnings. We reinvested the divestment proceeds of more than 500 million into mainly gas and industrial terminals. Therefore, the exposure to commodity markets, mainly in oil and chemicals, was reduced over the years. With the decreased share of these terminals in our portfolio capital allocation, from around 90% 10 years ago to around 50% today. The majority of 900 million euros invested, committed over the last years, are allocated towards projects in industrial and gas terminals, and they're all backed by long-term contracts. So ultimately, that's leading to an improved trend in the operating cash return. With regards to our third strategic pillar, accelerate towards new energies and sustainable fuels and feedstock, we see good momentum around the world. We see opportunities in new energies, and our presence in strategic locations helps us to capture these as well. In Rotterdam, we're taking next steps in the development of CO2 infrastructure. This open access CO2 terminal, called CO2next, may play a crucial role in further decarbonizing the industrial cluster of Rotterdam and beyond. After repurposing capacity in the US, the Netherlands and Singapore earlier, we commissioned this quarter repurposed capacity in Alamoa, Brazil, for renewable feedstocks. All these developments fit well in our strategy to accelerate the investments for infrastructure in new energies and sustainable feedstocks. To summarize, we continue to deliver another strong quarter and we are executing on our strategy to grow in industrial and gas terminals. We rationalized our portfolio over time and that has led to an improved cash flow profile of higher quality. We've invested almost 900 million euros in industrial and gas terminals since setting our strategic priorities. We continue to drive progress by focus on repurposing our current infrastructure for low carbon fuels and feedstocks and made the first investments in new energy projects. With that, I want to hand it over to our CFO, Michiel, who will give you more insights on the financial aspects of the first half of this year.